Northwest Arkansas Times from Fayetteville, Arkansas on May 7, 1974 · Page 7
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Northwest Arkansas Times from Fayetteville, Arkansas · Page 7

Fayetteville, Arkansas
Issue Date:
Tuesday, May 7, 1974
Page 7
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Page 7 article text (OCR)

Of Past Years Oil Men Evaluate Poor Profits By JOSH FITZHUGH ; NEW YORK (AP) - The oil companies haven't always been the great money makers they «re today, but they've never been paupers either. In 1972, a year most analysts agree was a poor one for the industry, nine oil companies ranked among the 25 most profitable industrial corporations in the land, based on the total number of dollars earned. · Even by the yardstick most commonly used, return on stockholders' investment, the oil companies show only a slight depression from industry as a whole, when the higih 1973 profits are included. In recent months, as the companies' profits have soared over levels set the previous year, oil executives have urged that their earnings be placed in perspective. "The profits are being compared to a poor quarter a year ago," says the typical oil executive today, who finds his firm coming under increased criticism from the public and Congress. "Our return on investment is still iniadequate for the exploration and development of energy the nation so desperately needs." FUEL SURPLUS Security analysis generally agree that the oil industry is emerging with a bang from a period of poorer profitability several years ago. They say the performance then was caused by fuel surpluses, increased competition from the independents and a reduction in the federal depletion allowance from 27 per cent to 22 per cent in 1969. Because 1972 was a down year for the industry whole, earnings gains in 1973 were somewhat deceptive analysts say. They say thai profits began to improve in the first part of 1973. so percentage figures this year should be much more meaningful. Likewise 1972 was the Industry's worst year in the past 10 in terms of return on investment. This rate, » comparison of net income to shareholders' total investment, is considered important because it indicates an industry's ability to attract money needed to expand and grow. ·In 1972. according to figures compiled by the Federal Trade Commission, the oil industry's return on investment fell to 8.7 per cent, compared with a 10.6 per cent rate for all indutry. 'Returns for the 12 largest oil companies in 1972 was 10.7 per cent, the FTC says, as against a 15.9 per cent for the autos and a 5.4 per cent return for 'Ive years, including im. earnings of 24 domestically based oil companies and four foreign ones "achieved an annual growth in earnings of U per cent." For the past ID years, the average increase fell f a r short of the growth required to provide the capital funds needed to keep pace with ex pansion of petroleum demand," the specialist says. Within the United States, the longer term growth of profits has been even less favorable, Winger says. "Although the group's earnings in 1973 were 19.1 per cent higher than in the year before, they were only 11.3 per cent higher than five years earlier. And the average annual growth rate for the past five years has been only 2.2 per cent. "Clearly tne United States cannot possibly achieve the higher degree of petroleum self-sufficiency it so urgently needs if profits continue to grow at such slow rates." Winger says. Only if the industry maintains the 15.6 per cent rate of return attained in 1973, will it be able to generate the required capital funds, he says. And there, .it seems, is the rub. The oil industry, some argue, is different than other industries. It is capital Intensive and carries heavy risks. It needs more money t h a n other industries lo build new refineries and drill new wells proponents say. Then there's the question ol whether the current high profits will continue? Securitj analysts and oil men are mixed. Some see a drop off ab the unusual circumstances of the past year fade, taxes in crease, government 'policies change and new production comes on line. Others, lik Chairman H.L.Hayne.s of Stand and Oil of California, are mon hopeful. Haynes hopes ti "match or improve" SoCal's 1 per cent 1973 rate of return. the steel industry. If an entire 10-year period LUJ Hinjcio Konrciii} luiiinnj LOS ANGELES (AP) -- After where in an area 110 miles 25 years of depending heavily on the car, many residents of this freeway-filled city are discovering a new way to get around: The bus. Thgre has been a rapid transit bus system In Los Angeles 'or years, but most persons lave found their cars more convenient. Now comes the 25-cent ride. And for many motorists, plagued by high gasoline prices and spiraling parking fees, the bus and its quarter ride have become too good to pass up. On April 1, county supervisors authorized $9.6 million from federal revenue sharing funds to allow riders to go any- Mathematics Institutes i Announced Three summer institutes for 5 secondary school teachers of t mathematics have been an- 1 nounced by Dr. W. R. Orton, - professor of mathematics at the University of Arkansas and 5 director of the statewide ; p r o g r a m in mathematics 5 education funded by the 7 National Science Foundation. 5 Dr. Orton said that institutes would be held this summer at 1 the UA at Fayetteville; the r Graduate Center in Little Rock t and Arkansas State Univer- s sity at Jonesboro. r The institutes are a part ol the comprehensive statewide i program, which is beginning its "" iu:_,i ...*..» unilur. an M3V urftnt wide and 55 miles long for just 15 cents. "The 25-cent ride has changed things and brought a lot of people around," says Jack Gilstnap, general manager of the Southern California Rap- d Transit District. For one ;hing, the number of riders jumped 15 per cent. District officials hope the pro gram will lure up to 25 per cent more passengers by June 30, when the program ends. If supervisors agree on the scope of its success, the program will be continued. To carry the new riders, the District bought new buses, re- Prisoner Escapes NEW YORK (AP) -- Eight inmates broke out of the Rikers Island prison facility Monday night, commandeered a tugboal and forced the skipper to take them to the Bronx police said. Police said a least three o: the prisoners were captured, but gave no details immediate ly. Riker's Island is in the East River just offshore of the South Bronx. The eight escapees scatteret after they were taken to the Tiffany Street dock in the Bronx, police said. The breakout occurred at 9:05 p.m.. but was not detected immediately, they said. Other details were not known. plying for any of the three institutes should contact Dr. W. R. Orton Department of Mathematics, University of Arkansas urbished 150 old ones anc ired 130 drivers to bring th' ital to 3.000. Buses now earn bout 670,000 persons a day bout 75,000 more than befor he 25-cent ride began. To increase bus business unday rides were cut to 1 ents. Also, motorists can par rcc in District lots in suburba Monte and San Gabriel an ide the buses to Los Angele nn a special freeway lane. Th uccess of the "park and ride ites has stirred plans fo more, Gilstrap said. He estimates the 25-cent cos replaces $1.32 that commuter used to pay For riding from xjng Beach to Pasadena, a di ance of about 35 miles. Fo iassengers traveling the miles from San Bernardino t downtown Los Angeles, the fai las been whacked from $2.02 1 1,43. Riders on that run pa he old fare schedule only fo he portion of their trip outsit ,os Angeles County, where th quarter fares do not apply. Tapes Printed NASHVILLE. Tenn. (AP) Employes of a Nashville prin ng firm worketl non-stop du ng the weekend setting tyr for an 898-page paperback hoc containing transcripts of Pres dent Nixon's Watergate conve through 1973 is examined, FTC third year .. figures show the oil companies' The grant provides support for . , -i _ __ summer study on college campuses by 90 secondary school teachers, grades 7-12 Dr. Orton said. In addition to tuition and fees the participants will be allowed ai allowance to cover room and board travel and textbooks with the amounts varying from $25 to $100 a week depending upon the cost to the participant. Two special courses will be provided in e a c h institute. Orton said. One course will require that the teacher prepare a syllabus to be used Bantam Books, Inc.. Sunda flew the printing mats to C] cago where the $2.5Q-per-co; books will be printed. Banta officials said copies will be the newsstands in 30 key citi by Tuesday afternoon. The Bantam version of t' Watergate transcripts will one of at least two such boo being prepared. Dell Publish] Co. of New York is expected have copies on the newsstan later this week. Army To Probe Ad Agency's Fund Handling Northwest Arkaniat TIMES, VAVITTCVII.I.I. MKAMSA* To-., May 7, 1974 Tape Gaps Said Caused By 'Swerping' WASHINGTON (AP) -- The rmy has begun a preliminary vestigation into alleged mis- andling of funds by an adver sing agency that holds a $35 Nixon'; illion contract for enticing tlons. ew military volunteers to en- st. Officials say Army investiga- rs will be reviewing the ecords of N.W. Ayer Son, a hiLadelphia agency that writes he volunteer Army ads that ppear in magazines, news- apers and billboards. In a statement released Monay in answer to questions, the rmy said: "As a result of cer- ain allegations made con- erning the Army advertising ccount for recruiting and re- ated matters, the Army Crimial Investigations Command is onducting an inquiry into the latter." A spokesman said results of he inqujry would determine Aether 3 full-scale formal in- estigation was warranted. NOT DETERMINED Reports of the initial inquiry irst appeared in the trade magazine Advertising Age. It ouW not be determined how arge a . dollar amount the al- eged mishandling of funds involved. One official source who asked lot to be named said an cm- iloye of the Ayer agency re- xirted to the Army the govern- nent was being overcharged or some magazine ads. The Ayer employe reportedly said ·ebates from various publica- ions were not reported as called for in the Army contract. The rebates were said to be due the Army because some ads should have cost less than nitially charged against the Army account. A senior executive in Ayer's 'Iiiladelphia headquarters said WASHINGTON (AP)-At last, an explanation for some of those "inaudible" and "unintelligible" gaps in the White House transcripts of President Nixon's Watergate conversa- Swerping caused them. Swerping? According to White House lawyer J. Fred Buzhardt, swerping is the noise on the ;ape during the time it takes allegation is total- The executive Monday the y unfounded. _,,_ _ _ asked not to be identified However, Neal W. O'Connor, :nairman of the agency, called or a speedy investigation into 'the charges which the press tells us have been leveled." Plea Delayed LITTLE ROCK - ( A P ) Gloria Jean Enoch of L i t t l e Rock has been given until May 20 to enter a plea to a charge of obtaining $262 in food stamps under false pretenses. Mrs. Enoch is the first person to be charged in what Pros. Atty. Lee Munson calls a massive food stamp fraud case. Munson said his office is looking into a scheme involving several persons and more than $7.000 a month in food stamps. The woman was to have entered a plea Monday, but said she had not had sufficient time to hire a lawyer. Steel Shortage Said Hampering Search For Oil DENVER (AP) -- As domestic oil production slowly drops, independent oilmen say they cannot get enough steel to drill wells that could turn the de cline around. Shortages of steel products used in drilling were the main topic of conversation as the Independent Petroleum Associ- alion of America went into the second session of its semiannual meeting today. The independents, who drill most of the wells in the country and produce about a third of all domestic oil annually, heard their leaders say a government study shows eight unnamed major oil companies have stockpiled about 70 per cent of the vitally-needed steel - products. This, they say, has created a shortage that is severely cur- .ailing the independent's search 'or new oil. But government and steel industry officials told the IPAA they are hopeful the shortage can be substantially eased by the end of the year. EAGER TO START IPAA members say they are eager to start drilling more wells now that the price of domestic crude is up as high as $10 a barrel. Federal figures show that 1,400 drilling rigs will be active throughout the year. This is the maximum number currently available. That's nearly 400 more than this time last year when oil was selling for just under $4 a barrel. Many IPAA members say the federal government should take an automatic recorder to start and get to recording speed- The White House taping system was actuated by sound. The microphones pick up a noise -- a voice, a slamming door, a clock ticking loudly-and the reels begin to turn. Buzhardt is a lawyer, not an audio specialist, but he was one of the first and one of the few to listen to the tapes. He offered his explanation in an interview with Westinghousc broadcasting Co. "Probably the most predominant cause of inaudible or unintelligible is the voice actuator system on which the system operates," lie said. "When there is a hesitation or interruption in speech the gain volume con- rol usually moves from the owest point of sensitivity to the lighest point of sensitivity." Still with us. "At the same time Hie tape reels, which have stopped turning with the interruption, :hen accelerate and pick up to playing speed. The combination of the gain control movement plus the acceleration of the tape through the recorder produces a swerping noise which normally obscures the first few syllables spoken after the interruption of speech." Buzhardt also said that there is a relationship between how deep the voice is a n d Uie ft lelily of the recording. The ower the voice, Ihe more dis- ortion, He said the President has * ower voice than John W. Dean II and therefore the former White House counsel come* hrough more clearly. Dean, he said, has a higher- pitched, rather flat tone of speech. "The President has, relatively speaking, a more bass voice lhan does Mr. Dean," Buzhardt added. "I guess Mr. John N. Mitchell has Ihe bassest of the voices in any of the tapes that were recorded, and he is almost mpossible to hear on the recordings." For the record, it should be noted that there are about 1,670 Krtions claimed by White House transcribers to be in- judible or unintelligible. In 1.075 of them the President wa» speaking. There is no count yet on how many were caused by swerping. EXPERT WATCH HCPAI* 1 ' ' ' ' ' / ff S W I F T S n North *\yf lm»l»«^ DILLARD'S i immediate action to redistribute the steel products. But David Kimbell, chairman of he TPAA-s special materials committee, told the membership a f e d e r a l allocation system should be avoided. He said his committee has presented a plan to the Federal Energy Office. The plan emphasizes voluntary industry actions and FEO jawboning. return on investment at a median 11.38 per cent, compared with 11.58 per cent for all manufacturing. PROFITABLY INDEX Analysts and economists say a major task in assessing the over-all profitability of the oil is knowing what use. Percentage companies measure to gains over previous years, return on investment, profits as a percentage of sales, earnings per share and just plain stock prices are a few of the many indicators employed. New York's First Nationa City Bank keeps return on sales figure? for various industria groupings -- and these are much more favorable to oil. For the last 10 years, the oil Industry's profit margin - or income as a percentage of sales has a median of 8.3 cents to the dollar. Citibank says. This compares with all industry's 5.5 shows in his school integrating cents on the dollar. "The profit margin how well the industry covers its costs." says Robert Lewis, Citi- bank's vice president who compiles the figures. In a recent newsletter entitled "The Profit Situation." John Winger, an energy specialist for New York's Chase Manhattan Bank, utilizes yet another figure to measure profits. GROWTH IN EARNINGS Winger says that for the past Our 37 minute morning nonstop gives you a full business day in Little Rock. mathematics laboratory ac tivities into the curriculum. In addition each teacher will take one other three-hour course in mathematics or in secondary education. All courses will c a r r y residence graduate credit. The Fayetteville section of the institutes will be directed by Dr. Kathrine Mires with Dr. Jay Graening as coordinating instructor. The courses here will be mathematics 5103 "Mathematics S e m i n a r in Laboratory Methods" and any other mathematics or education course taught in the regular first-term summer session May 31 through July 12. The Little Rock session will run from June 3 to July 12 and the Jonesboro course will begin July 8 and end August g Teachers interested in ap- SHERIFF'S ,, OFFICE * DICK HOYT There's no fuel like our fuel for a business trip. Save your gas for better things and fly our Convair jet-prop commuter special when you have business in Little Rock. We're going your way anyway, so save time as well as gas, and take advantage of it. Before you've finished reading the morning paper, you're there. Our return flight late in the day will get you home before nine. Yes, Dick Hoyt to "IN". He'« holding a meetiaf witfc pnm representatives to assure men of an "open-door" newi policy. The public i« entitled to know what ii going on and Dick Hbyt will keep n» ·eereto trom yon. Elect "Dick" Hoyt Sheriff of Pol. Ad paid by Dick Hoyt, T.y«tt«vUl. LOBWB FayettovMe Ar. Littte Rock 8:56 a.m. 9:33 a.m. 1:28 om. 4:08 p.m. L». Lrttte Rock 1:35 p.m. 7:05 p.m. for reservations, call your Professional Travel Agent or frontier. 442-7306 IS SUNDAY, MAY 12 Lovely Looks For Mother Short Gowns Long gown · $10 Short robe $12 Pajamas $12 long robe $14 Matching scuffs $4 Silky nylon tricot ileepwear In shade* of French navy or geranium with Swiss applique scalloped eyelet embroidery. Gowns, robes and scuffs in S, M, L Pajamas in 32 to 40. Budget lingerie--DILLARD'S--First Floor Open Monday Through Saturday 10 A.M. Until 9 PJM.

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